dropdownlist in GridView Data Bound not behaving correctly ASP.NET C#

The reason behind this behavior is SqlDataSource being used as DataSource for the dropdownlists inside the GridView.

During DataGridView_RowDataBound event you are changing default values of the parameters of SqlDataSource and rebinding the dropdownlist of the row. When you change the Default values of parameters the outcome of the query execution by SqlDataSource impacts all the dropdownlists so eventually all the dropdownlists will have the query result generated by the values passed by the last row of the gridview. That is why you get the same result in all the dropdownlists of the grid.

You need to run the query everytime and retrieve the result and bind it separately to each dropdownlist without using any common datasource among them.

While the solution you found is works with no issues, it would require a SQL connection to be opened and run query against the db for each Row of DataGridView.

The approach I suggest is to retrieve the all the rows from the Equipment table and store them as a collection of entities at page level and then during rowDataBound event filter the collection for the current Category and SubCategory and bind the filtered result to the dropdown list.

Following is the entity Equipment

public class Equipment
{
    public int Id { get; set; }

    public string Name { get; set; }

    public string CategoryId { get; set; }

    public string SubCategoryId { get; set; }

    public string FullName
    {
        get
        {
            return string.Format("{0} {1}", Id, Name);
        }
    }
}

In the Page_load populate the collection of Equipment by retrieving all the rows from Equipment table in the database.

public partial class _Default : Page
{
    private List<Equipment> equipments;

    protected void Page_Load(object sender, EventArgs e)
    {
        equipments = new List<Equipment>();

        var commandText = "SELECT EquipmentId, EquipmentName, CategoryId, SubCategoryId FROM Equipment";

        using (var connection = new SqlConnection("Data Source=.;Initial Catalog=LocalDevDb;User id=sa;Password=Password1"))
        {
            using (var command = new SqlCommand(commandText, connection))
            {
                command.CommandType = System.Data.CommandType.Text;

                connection.Open();
                using (var reader = command.ExecuteReader(System.Data.CommandBehavior.CloseConnection))
                {
                    while (reader.Read())
                    {
                        var equipment = new Equipment
                        {
                            Id = reader.GetInt32(0),
                            Name = reader.GetString(1),
                            CategoryId = reader.GetString(2),
                            SubCategoryId = reader.GetString(3),
                        };

                        equipments.Add(equipment);
                    }
                }
            }
        }
    }
}

Filter this collection based on the CategoryId and SubCategoryId and bind the result to the DropDown.

protected void GridView1_RowDataBound(object sender, GridViewRowEventArgs e)
{
    if (e.Row.RowType == DataControlRowType.DataRow)
    {
        DropDownList EquipmentDD = (DropDownList)e.Row.FindControl("dropDownList");

        HiddenField EquipmentCategoryIDHF = (HiddenField) e.Row.FindControl("EquipmentCategoryIDHF");
        HiddenField EquipmentSubCategoryIDHF = (HiddenField) e.Row.FindControl("EquipmentSubCategoryIDHF");

        var categoryId = EquipmentCategoryIDHF.Value;
        var subCategoryId = EquipmentSubCategoryIDHF.Value;

        Func<Equipment, bool> criteria;

        if(!string.IsNullOrEmpty(subCategoryId))
        {
            criteria = criteria = equip => equip.CategoryId == categoryId && equip.SubCategoryId == subCategoryId;
        }
        else
        {
            criteria = equip => equip.CategoryId == categoryId;
        }

        var list = equipments.Where(criteria).ToList();

        EquipmentDD.DataSource = list;
        EquipmentDD.DataBind();
        EquipmentDD.Items.Insert(0, new ListItem());

    }
}

Here in my example, CategoryId and SubCategoryId columns are created with String datatype. You need to change them to appropriate if they are different than columns of your table.

This should help you solve your issue.